AAPL Stock: Analyst Issues Grim Warning on iPhone Sales

AAPL StockHas AAPL Stock Seen the End of iPhone Sales Growth? 

Apple Inc. (NASDAQ:AAPL) “iPhone” sales could be in for slowing growth rates, some analysts predict, despite CEO Tim Cook’s claiming the contrary and strong AAPL stock performance.

There’s been some great headlines in the news recently for AAPL stock, perhaps none more positive than the 100%-plus operating profits the company registered last week in the smartphone market. That, coupled with the fact that Samsung Electronics Co Ltd, one of its leading competitors, is at 0.9% of the profit share, and it seems as if Apple and AAPL stock are on the right track.

But, as CNBC reports, weak demand in China, slower sales of the “iPhone 7,” and the lack of a new 4-inch, less expensive “iPhone SE” could all hinder future growth, according to KGI Securities analyst Ming-Chi Kuo. (Source: “Apple’s iPhone sales set to continue falling, top analyst says,” CNBC, November 7, 2016.)

KGI expects 40 million to 50 million iPhones to ship in the first calendar quarter of 2017, down from 51.2 million in the same quarter from the previous year.

Several other issues that Apple has to confront moving forward include the otherwise massive market share that “Android” phones currently hold. 88% of the 375 million new smartphones shipped worldwide were running the Android operating system, according to a new report from Strategy Analytics. Additionally, some of the larger emerging markets are set to begin purchasing smartphones in the near future. Places like India, Indonesia and parts of Africa will first look for inexpensive options that Apple’s iPhone simply doesn’t offer.

At least, not yet. The iPhone SE is often seen as a more affordable counter to Android phones. However, with no new iPhone SE model arriving in spring, then that quarter could also see weaker shipping numbers compared to the previous year, KGI estimates.

CEO Tim Cook in a conference talk late last month, was still positive on iPhone growth.

“Looking forward, the response to the iPhone 7 and 7 Plus has been very positive,” Cook told investors. “It’s very hard to gauge demand, as you know, when you’re selling everything you’re making. So we’ll find out more through the quarter, but we’re confident enough to give you guys guidance that we’re returning to growth this quarter, which obviously feels very good for us.”

While the strong profit numbers coming out of Apple are likely to power AAPL stock for the near future, iPhone sales growth (or lack thereof) is certainly worth following.